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German firms eager to access Japan's defense market

After seven decades of self-imposed exclusion from the international arms sector, Japan has opened up to foreign companies. German firms are looking to cash in on the opportunities. Julian Ryall reports from Yokohama.

Japan is hosting its first ever international defense industry trade exhibition and conference, further emphasizing the government's sharp departure from a 70-year, self-imposed ban on the export of defense-related equipment by Japanese firms as well as collaborations with foreign defense companies.

The three-day MAST Asia 2015 exhibition, kicked off on May 13, focuses on the naval sector and is being staged in the port city of Yokohama, south-west of Tokyo.

Complemented by a series of lectures on naval technology, tactics and theory, the event has attracted defense companies, government officials and delegations of senior military personnel from around the world.

Firms from the United States are much in evidence, inevitable given Japan's close security alliance with its Pacific partner, but a number of German companies are testing the waters of a new and potentially lucrative market.

Learning about the market

"The reason we are here is, primarily, to simply get to know a lot more about the market, to find out its potential for our company and present ourselves to firms that could become our clients or collaborators," Steffen Leuthold, head of corporate communications and political affairs for Atlas Elektronik GmbH, told DW.

"We have not come here expecting to win contracts straight away, but on the other hand, you never know," he said.

Based in Bremen, Atlas Elektronik provides an array of maritime solutions, including sonar, command and weapons deployment systems, mine countermeasures equipment, unmanned underwater and surface craft and shipping guidance systems. "There has been a lot of interest in what we do, particularly in the unmanned vehicles," Leuthold added.

That interest has been stoked by the government of Prime Minister Shinzo Abe relaxing the restrictions imposed on Japan's defense sector since the end of World War II.

That is in part to enable domestic companies with cutting-edge technology that can be applied to defense and security as well as purely civilian applications, while there is also a desire in this conservative government to see Japan become what some call a "normal country."

New interest

Conservatives insist that Japan should have the right to operate a military - instead of the cautiously named Self-Defense Forces that it has at present - and that it should have the right to take its place among allied nations in conflicts that Tokyo believes it has a stake in.

That has gradually emerged in recent years, with Japan's Maritime Self-Defense Force, for example, playing a significant part in anti-piracy patrols off the north-east coast of Africa. That mission was considered to be in Japan's national interests due to the nation's heavy reliance on oil from the Middle East.

Not all of Japan's neighbors have welcomed what they claim is a return to the aggressive nationalism of the early decades of the last century. China and South Korea, in particular, have been vocal in their criticism of Japan's increased military spending, although only the most extreme propagandist would claim that Tokyo is once again planning to invade mainland Asia and make it into a colony.

As well as the new business that it will potentially bring in, Japan's new-found interest in defense is being prompted by fears over China's growing assertiveness in the region.

Upsetting the balance

Satoshi Morimoto, a former minister of defense, declined to mention Japan's neighbor by name in his keynote speech to open the event on Wednesday, but his target was unmistakable.

Emphasizing that the stability and security of the sea lanes that transport 90 percent of Japan's trade - including critically important energy supplies - are "the cornerstone" of the nation's naval strategies, Morimoto said Japan "has to counter any threat to maritime security."

That needs to be achieved through maritime governance through the rule of law, Morimoto added. However, other nations are ignoring those accepted conventions, the former minister underlined. "In the East China Sea and the South China Sea, we are concerned by any unilateral actions, such as large-scale land reclamations, which threaten to upset that balance."

Japan is considered to have one of the most advanced naval capabilities in the world

Japan will "strongly oppose" any attempt by any country that seeks to expand its territory "through the use of intimidation, coercion or the use of force," said Morimoto, who is now a scholar of international politics and security at Takushoku University.

Morimoto called for all sides to stick to a code of conduct in the South China Sea and direct links between all of the parties with a stake in the region in order to prevent a minor incident blowing up into a full-scale crisis.

Opportunities

Japan is considered to have one of the most advanced naval capabilities in the world, but it is heavily outnumbered in comparison to China. That means Tokyo needs to invest in the latest technological advances that it can purchase from around the world.

China and South Korea have been vocal in their criticism of Japan's increased defense spending

"We have been working with a Japanese partner in the civilian sector for 15 years and next week I will sign my first naval contract with Japan for a system for their new submarine rescue vessel," Jurgen Kroll, regional sales director for L-3 Communications ELAC Nautik GmbH, told DW.

Domestic technology giant NEC has been purchasing the Kiel-based company's components, but Kroll now believes the time is ripe for ELAC Nautik to build additional contacts for its covert underwater communications systems.

"They are opening their borders to foreign military equipment and the market could be extremely significant. That is why I came to Japan four times last year and it is worth my while to focus my efforts on the Japanese market," said Kroll.